Category: Uncategorized

With three new bills, the Government aims to improve the country's business environment and motivate entrepreneurs and investors alike. In fact, it plans to increase the contribution of micro, small and medium-sized enterprises (MSMEs) to the national Gross Domestic Product (GDP) and improve the country's ranking in the World Bank's business climate report, in which Paraguay has slipped to 108th place.

The three projects are:

1. Law of Movable Guarantees: facilitates the access of MSMEs to credit, making the type of goods used as collateral more flexible and adopting a single system for the registration of movable guarantees to be administered by the Central Bank of Paraguay.

2. Insolvency Resolution Law: prioritizes procedures aimed at the recovery of companies considered viable that are experiencing economic or financial difficulties. In other words, it opts for reorganization instead of liquidation, providing protection to employment and the usefulness of productive assets.

3. Law creating the Simplified Joint Stock Company (EAS): creates a new type of legal entity with the intention of simplifying management, reducing costs and promoting the formalization of companies. This new type of company may be incorporated online and may be opened by a single partner -who will own all the shares- in order to attract funds from investors and promote associativity.

The latter project was worked on jointly with specialized advisors from the law firm Vouga Abogados, in addition to professionals from different institutions such as the Ministry of Industry and Commerce, the Ministry of Finance, the Ministry of Justice, the Central Bank and the World Bank.

These regulations will reduce bureaucratic and costly procedures to simplify the opening of businesses. In addition, they will be key elements to facilitate access to credit for MSMEs, considering that this group represents more than 2 million Paraguayans.

Sources: Diario La Nación y Ministerio de Industria y Comercio.

The National Gaming Commission (CONAJZAR) plans to present a project to update the law that creates the Commission and adapt it to the new gaming modalities. The intention is to give predictability to all possible games of chance and to include new forms of regulation, such as on-line controls and coordinated control with the Municipalities regarding the canon that they must receive.

From these new controls, greater transparency will be achieved in the actions of the Commission, which also has among its functions the bidding for the exploitation of gaming sites. At present, CONAJZAR collects about US$ 20 million annually in royalties, which it distributes to DIBEN assistance programs (30%), to Municipalities (30%) and to the National Treasury (10%).

To prepare this project, we collaborated with institutions in other countries and compared similar regulations. It is expected to be presented in the first half of the year in order to update the law as soon as possible.

Source: Paraguayan Information Agency

As part of the cooperation between Paraguay and the Development Bank of Latin America (CAF), support of up to US$1.5 billion is planned for the next five years. Non-reimbursable technical cooperation is also planned in areas such as combating money laundering, public management of MSMEs and their formalization, among others.

The authorities have defined the main projects where efforts and investments will be concentrated, which will be in the transportation, energy, water and sanitation sectors. Likewise, progress will continue to be made in the social agenda, improving productivity, competitiveness and economic diversification in the country.

This alliance translates into significant support for large-scale projects, such as the reconstruction of the Transchaco Highway and the strengthening of the country's energy system.

Source: Paraguayan Information Agency

The works of the Bioceanic Corridor - Carmelo Peralta-Loma Plata section - are already in full execution. The works are being carried out in three work fronts: Filadelfia, Loma Plata (Boquerón) and Carmelo Peralta (Alto Paraguay). It is estimated that the first 25 kilometers of work will be completed this year.

The project, which has a 38-month execution period - scheduled for completion in April 2022 - will be divided into 20 sections. This is one of the works planned to promote the development of the Paraguayan Chaco and generate more jobs.

On the other hand, next May the awarding of the works for the Costanera Sur will take place in order to start the work in December. The duration of these works will be almost 40 months, with an investment of US$ 170 million for an extension of approximately 7.5 kilometers of avenue.

The project covers an area of approximately 7.5 kilometers between the banks of the Paraguay River, the Yukyty stream, the vicinity of Cerro Lambaré and the vicinity of RI14 up to Colón Avenue.

Source: MOPC and Paraguayan Information Agency

On March 8, 2019, the National Securities Commission (CNV) has issued Resolution CNV CG No. 1/19 “General Regulations of the Securities Market”, which is intended to regulate Law No. 5810/17 “Securities Market”; Law No. 5452/15 “Which regulates Equity Investment Funds”; Law No. 1163/97 “Which regulates the establishment of Commodities Exchanges” and its amendment, Law No. 5067/2013; and Law No. 3899/09 “Which regulates risk rating and the operation of Risk Rating Companies”.

The resolution establishes the criteria that determine the quality of qualified investors as well as institutional investors. It also contains provisions regarding the incorporation, organization, operation and registration in the CNV Registry of stock exchanges, brokerage firms, mutual fund management companies and mutual funds managed by them, and risk rating agencies. With respect specifically to brokerage firms, the regulation regulates both stock exchange and over-the-counter operations.

The regulations issued by the CNV also contain provisions regarding the registration of issuers (SAE, SAECA, SMEs, multilateral organizations, foreign issuers) as well as the requirements for the registration of securities issues (debt securities, mortgage bonds or bills, subordinated bonds, stock market bonds, shares).

It should be noted that the general regulations incorporate rules applicable to the incorporation, organization, operation and registration with the CNV of commodities exchanges and a special regime for the exercise of the activity of commodities brokers.

Likewise, the regulation establishes guidelines that regulate the transparency regime of the securities market and includes provisions on corporate governance applicable to the entities supervised by the CNV, not to mention those related to the activity of external auditors.

It is important to highlight the relevance of this resolution, since it reflects a regulatory update that will give greater impetus to the development of the Securities Market in Paraguay.

For further information regarding the regulations issued by the CNV, please do not hesitate to contact Cynthia Fatecha (cfatecha@vouga.com.py), Carlos Vouga (cvouga@vouga.com.py) or Georg Birbaumer (gbirbaumer@vouga.com.py).  

As a Paraguayan member of the prestigious Employment Law Alliance (ELA), Vouga Abogados is pleased to invite all its clients and colleagues to participate free of charge in the Webinar “Immigration 101: Rules, Regulations and Reality” to be held on March 26, 2019.

On this occasion, Eusebio López, who is a member of the team of lawyers of Vouga Abogados, will participate as a lecturer.

As a Paraguayan member of the prestigious Employment Law Alliance (ELA), Vouga Abogados is pleased to invite all its clients and colleagues to participate free of charge in the Webinar “Women in the Workplace” to be held on March 27, 2019.

ELA presents top lawyers from the Middle East region for a roundtable discussion on topics including:

• Statistics on women in the workplace
• Equal rights in labor legislation
• Existing rights against discrimination of women
• Promoting women's participation in the private sector

For more information and to register for the Webinar, please see the following link:

http://event.on24.com/eventRegistration/EventLobbyServlet?target=reg20.jsp&partnerref=CventInvite&eventid=1938991&sessionid=1&key=1D35AE799272084C7C8018021398D386&regTag=&sourcepage=register

In times of #Metoo and the increase of reports of abuse and sexual harassment in the world, the MTESS has also considered it necessary to establish certain preventive measures in order to avoid or minimize the facts generated as a result of violence in the workplace. In this sense, it has issued Resolution No. 388 dated February 18, 2019 (hereinafter the Resolution) which defines Workplace Violence as “... any action exercised on the worker in a direct manner through acts, comments, propositions or conduct with sexual or non-sexual connotation, mobbing or sexual harassment, not consented to by the victim, exercised by superiors or colleagues of equal or lower hierarchy...” 

The Resolution creates an Office of Attention and Prevention of Labor Violence under the MTESS with specific functions for the sensitization, training and dissemination of the problem, and the carrying out of research tending to a better understanding of the problem, establishing specific procedures for the treatment of complaints related to acts of labor violence.

The established procedures distinguish between: (i) labor violence exercised by superiors or colleagues of equal or lower hierarchy, and (ii) labor violence exercised by the highest authority of the employing company.

The penalties applicable to cases of Workplace Violence of type (i), will be those indicated in the Internal Labor Regulations, and eventually dismissal without cause. While the sanctions applicable to type (ii), will be the justified dismissal of the worker and therefore the obligation to pay the indemnity provided for in Art. 85 of the Labor Code, in addition to a fine for the employer of between 10[1] to 30 minimum wages for each worker affected, which shall be doubled in case of recurrence.

All employers with more than 10 (ten) employees who must have approved Internal Work Regulations must expressly include in said regulations an internal procedure for cases of workplace violence, establishing measures to prevent, control and carry out education and training programs for the prevention of workplace violence. 

According to the Labor Observatory Directorate of the MTESS, in the last year, 47.6% and 52.3% of complaints of labor violence affecting both men and women, respectively, have been received.

For more information about the new labor provisions and compliance, please contact Perla Alderete (palderete@vouga.com.py) or Walter Vera (wvera@vouga.com.py).



[1] One legal minimum wage is equivalent to G. 81,252.

Geographical Indications and Designations of Origin (GI/DO) are a recognition of the existence of certain products that enjoy unique characteristics linked to the geographical area from which they originate - due to certain natural conditions and the traditional way in which their producers work. This recognition benefits the consumer, who can identify products of superior or differentiated quality. It also improves the producer's position in the market by allowing better remuneration for his products.

On February 15, Decree No. 1286 was signed to regulate Law No. 4923/2013 “On Geographical Indications and Appellations of Origin”. This decree has 50 articles dedicated to the detailed regulation of this law, and entrusts its application to the National Directorate of Intellectual Property (DINAPI).

Among other aspects, the decree details the technical specifications to which a product must conform in order to apply for GI/DO registration, the criteria governing the delimitation of the production area of a GI/DO (geographical and environmental factors, customs and traditions of the region, etc.) and the procedure for initiating the registration and recognition of a GI/DO.

This recognition aims to generate a positive impact on the country's economy, emulating the experience of other countries that experienced a benefit in areas such as tourism, gastronomy, research and advertising in general. Thus, it is also intended to increase job opportunities and contribute to the construction of the cultural identity and traditions of the nation.

If you would like to know more about this type of procedure, please do not hesitate to contact Laura Lezcano (llezcano@vouga.com.py).

The National Cadastre Service (SNC) is seeking to modernize in order to reduce the delivery times of documents requested by citizens. Thus, the SNC has reported that, instead of taking 25 days, it has been able to issue certificates in 24 hours (electronically).

The director of the institution explained that three elements come into play in the process of registering real estate -whether by transfer or when a mortgage is sought-:

- The physical appearance (the property),

- The party or parties (owners) involved in the process, and

- The right or legal relationship between the object and the subject.

In this scheme, the CNS is in charge of the description of the property, which is materialized in the Cadastral Certificate that allows the acquirer a better knowledge of the property. Therefore, a fluid communication between the CNS and the Public Registry is necessary, since the procedures must be harmonized.

In this regard, the CNS began to grant the Public Registry Directorate access to its computer system, and today it has an internal office that manages all registry information. In this office, any discrepancy between the information of both institutions can be resolved. With this, 10% of the Cadastre's processes are now carried out electronically and in real time, and the process of convergence between institutions can now be considered to have begun.

Source: Paraguayan Information Agency